Archive for August, 2008

Cruise market segmentation; admirals and stowaways

What did you eat for breakfast this morning?  If you are diabetic, it was likely a slice of whole wheat bread and cottage cheese.  A wrestler? Add eggs, bacon, potatoes, orange juice, butter, milk and jelly.  From India?  A nashta.  Cuba, for sure there will be a cafecito.  So culture, health and profession are at least three variables that could predict what you will eat for breakfast.

Given knowledge of other possible variables and a large enough data set, one could accurately predict within a range of six or seven items what you will eat for breakfast and be right 95% of the time.  Your spouse, after living tog

Disney Fantasy in New York

Disney Fantasy in New York (Photo credit: insidethemagic)

is important to Cruise Line marketers?  Because travelers, like breakfast eaters, make decisions based on a set of variables relevant to their lives.  Knowledge of these variables and the segments that share them in common lead to five things:

1. Development of product and experience to match consumers price and desire
2. Effectiveness in delivering the right message
3. Efficiency in marketing with the right channels
4. Ultimate satisfaction of the consumer
5. And the chirping they will subsequently do with others in their pod

The graphic below illustrates a number of variables that predict cruise behavior, and how they might aggregate to form market segments.



Explorers- The segment we love to love.  These folks take four or more vacations per year, have disposable incomes and take longer cruises, exotic cruises and cultural learning cruises.  Education and social causes are important to them.  So are making friends and socializing.  It’s a smaller and more saturated segment, but one that is lucrative and important to satisfy to retain their business. This group also represents future opportunity, as more couples become empty nesters and retired upscale boomers.

Admirals- These folks have selected their preferred cruise provider and seek a traditional experience.  They tend to ritualize their travel experience and don’t usually experiment unless their favorites start to become stale or so radically different the attributes they admired become unrecognizable.  Great cruise consumers,  they tend to be older and a good, loyal customer base but offer less opportunity for growth.

Marines- This desirable yet elusive segment is made up of upscale, motivated and active young professionals.  They are most likely to snorkel, para-sail, surf and rock climb. Whether new or experienced cruisers, they are always auditioning better ships.  They are intellectually curious, media-involved, and they perceive value in not only the appearance of being active but also the reality of learning and being challenged.  Cruise companies can grow well in this segment.  They are the logical target for active ship design strategies as well as expanding Internet marketing.

Little Mermaids - This segment is made up of upper middle class families.  They are experiencing an increase the pace of daily activity and a crunch for time.  With every non-working moment devoted to family errands (stopping at the Home Depot to pick up an attachment for the air pump for the kids pool or running to Target for a new basketball for the son’s friends birthday party) they are looking to maximize leisure activity as a family experience that includes opportunities for real quality-bonding.

Escapers - This is a desirable segment and probably the core of the cruise market.  They are just looking to get away.  All-inclusive is just fine.  No complications, no worries.   From their point of view, after having spent a hectic year in the rat race with traffic jams, bad tempered people and an abundance of things that need to be done, they have earned the pleasures of doing nothing but sitting by the pool, seeing a few sites and relaxing.  They are somewhat price sensitive but will always find the money for the trip they deserve.

Souvenirs - These folks have jobs (not careers) and lives (not lifestyles).  Because the exact line isn't as much a priority for them as price, their cruise habits skew toward just taking a trip more than specific destinations or activities.  Lacking intense interest in the world outside they are primarily focused the internalized experience of the moment.  They tend to take a cruise vacation only when there’s a “really good deal” that everyone’s talking about.

Adrift - There is a group of people in every society who are disconnected from travel commerce, not curious about what's going on in the world and not likely to posses the disposable income.  This segment is a realistic target for the attention of breweries and bait shops - not cruise line marketers
This is a theoretical model to be refined with ongoing ethnographic research and ultimately requires validation and statistical modeling with quantitative survey data.


Apollo Management: Will three plus ten equal one?

Will Apollo Management acquiring three top cruise brands in ten months equal one publicly traded company?

  • premium cruise line Oceania acquired April 2007 ($850 million)
  • contemporary line Norwegian acquired August 2007 (50% ownership $1 billion)
  • luxury cruise line Regent Seven Seas acquired February 2008 ($1 billion)

One would imagine they have a larger strategy in mind.  It may not be long before we see a publically traded company that intergrates all these holdings under one umbrella.


Partnering with land-based destinations

It is an interesting fact that 38% of all cruisers have returned to destinations for a land-based vacation after first going by cruise.  In fact, when comparing the benefits of cruising over other vacations, 61% consider it preferable specifically because it provides a chance to scope out several different locations in one trip.

With some cruisers taking up to four additional non-cruise vacations a year, this strikes me as a tremendous opportunity.

Wouldn't it open the possibilities to brand extensions into hotel chains or destination-based businesses?  I commend Carnvial for past experimentation with Carnival Crystal Palace hotel in Nassau and Carnival Air, but see a time to innovate new ways to capitalize on returning visitors.

I'm not speaking about expensive acquisitions in areas outside of core competencies, I am speaking about joint ventures, name leasing arrangements or marketing partnerships.  For example, Donald Trump has earned several million of his dollars not as developer or an investor but by having others pay him to use his name on their condominium towers.

New and upcoming developments like Xcarat find value in extending awareness among potential visitors.  They could name and create an exclusive activity within the park for a cruise line. In return, the cruise line extends time of stay in the local port (allowing time to experience the activity).  The cruise line wins because its brand is seen by non-cruise visitors to Xcaret and cruise travelers choose it over competition because of the exclusive experience. Xcarat wins the traffic of the cruise line and the visitor wins all around.


Get Your Pod Chirping; Grow Your Market Niche

You will read me referring to “getting your pod chirping” throughout this blog. What do I mean?  Well, dolphins swim in pods. And as it turns out, these aquatic mammals are actually quite social. They communicate by producing chirps, whistles, creaks, chuffs, screams, squawks and pops.

What does this have to do with marketing? Well, the ocean is a big place and so is the marketplace (if you are going to be all things to all people).  If you are tossing a pebble into the sea it is time to rethink your strategy.  Here are five simple rules to help you focus (click here for the video).

1. Pick a pod.  One that will immediately find value in your product or service (will help the pod catch more fish, swim faster or discover new ways to play).  You want to find the pod you can make “chirp.” If you are setting out to be a better Google, Microsoft, Publix, Ebay, Hoover, Nebraska Furniture Mart, the Rolling Stones or any other dominant market leader then I propose you may be trying to drink the entire ocean in one gulp.  Are your resources inexhaustible? Better to change the rules, disrupt the status quo and find a niche where you can be the best in the world.  Pick a pod like Addthis, Quicken, Wholefoods, Skype, Dyson, PB teen and Lou Reed.

2. Get the attention of the pod. The pod is busy chasing its next meal. To get its attention requires a product that will resonate throughout it.  One that is different, unique, extraordinary, of real value and delivered with a true passion.

3. The right product or service must be focused on gaining the attention on the alpha influencer. Which dolphin is leading your target pod? If your idea can get the alpha influencer chirping, then it will evangelize it to the rest of the pod.

4. Is your pod chirping? If so, you’ve succeeded in reaching the tipping point within your market niche. Now you need to deliver on the promise of your brand. Do you provide irreplaceable value? Do the members of the pod bestow status upon users of your product or service?  Can your pod rely on you to deliver time and time again?  Can the pod no longer imagine the ocean without you?

5. Now that you’ve left the “long tail” of “OK,” “average” and "also run" behind; you are a market leader in your pod.  It is your job to stay alert and ahead of the sharks (the next disruptive wave).  Remember, if your looking ahead, with each disruption comes a new opportunity.  While the music, automotive and movie industry pods are threatened and scattered, allmusic guide , smartcars, solaris and imdb thrive.

To stay motivated on your quest, check out Seth Goodin's post - In search of dolphin leather


Motorcycles on-board cruise ships

Waiting for a cruise ship to pass byI had been wanting to blog about a “biker” themed cruise – after all, there are 6.6 million motorcycles registered in the U.S. (growing 37% since 2001). My idea is to bring Bret Michaels of Poison, reunite Nazareth and land Blue Oyster Cult (you get the idea).  Then I ran across Bill and Sandy Papagno at Bikes on Board. They have done it a bit different – better if you prefer actually riding. You can really bring your own motorcycle on the ship with you! If you read my blog you know I love simple, good ideas that serve niche markets. Bill and Sandy are creating a “chirping within the pod” i.e. doing something so cool that it gets the niche market members talking about it…like I am now. Kudos guys.


Your feedback is needed

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The next great wave

Online cruise travel bookings

Internet Usage to Book Online Cruise TravelThe chart to the left shows the percentage of cruisers who use the Internet to contact a travel agent. I saw Internet growth figures like these in the late 1990's for usage of the Internet for news.  Today the number is well past 70%.

Travel agents and cruise lines also need to avoid what airlines fell victim to: online searching for tickets helped to create a commodity like lowest price war.  In fact, travelers already most frequently believe that the best prices can be found on the Internet (51%) and the assumption is even higher among non-cruiser vacationers (59%).  Continued branding and building of distinctive ships and activities will be paramount to communicate it's The Line you choose for the journey, not just a transportation vehicle to sample destinations you are likely to visit again.  (Side note: 80% of cruisers agree that cruise vacations are a good way to sample destinations they may wish to visit again.  Click here to learn more on topic.)

Since this online booking behavior is most typical with newer and younger cruisers (the contemporary segment) it represents tremendous opportunity for growth.  While Travel - Ground/Cruise accounts for 6% of all web traffic, or 11 million unique visitors, the dominant share of online traffic between the big three Cruise Lines is still very much anybody's game.  See CruiseSearch for more.  Whoever can do it best will capture a larger share of the online cruise booking market.  The opportunity could be in integrating service functionality into the website - only 17% see websites and online travel retailers as providing the best service.

Here are some other Internet related cruise research facts:

  • When choosing vacations, cruisers are influenced by multiple sources, especially destination web sites (39%) and cruise websites (28%).
  • Cruisers plan trips well in advance (5.6 months) compared to non-cruisers (4.9 months) - giving them plenty of time and reasons to go online.

Sources: Comscore


Geography of online cruise search

The map below illustrates where people searching online for cruise topics come from. It shows the truly international market of the cruise industry today. Within each geographic market resides its own set of opportunities and consumer dynamics.

Source: Google Insights

Adding learning based courses to the on-board itinerary

How about learning Spanish, how to cook a traditional Jamaican dish or the history of the Caribe Indians from a tenured University professor?  Based on the results of a recent survey, cruise lines might do well by adding specific learning based courses to on-board itineraries.

From cooking and fitness to theatre and the arts to fashion and spectator sports, the survey found that personal interests are key drivers in vacation decisions. A few interesting facts about travels:

  • 87% indicate that personal interests drive the majority of their vacation plans
  • 60% say the stronger they feel about a passion, the further they've traveled for it
  • 57% are willing to travel any distance to explore their personal interests
  • 36% said they wouldn't consider a vacation destination that doesn't help them fulfill at least one personal passion

Vacations that incorporate personal passions also tend to be longer by almost double the number of days compared to those trips that do not include personal interests (16 days versus 9), more frequent (6 trips versus 3), and more expensive ($3,900 versus $2,400).

What are the most popular travel passions?

  • Culinary Interests: A growing number of travelers are inspired by the desire to expand their culinary horizons. In fact, 42% said that culinary factors, including the ability to try new cuisine and indulge in truly exotic/native dishes, were extremely/very important to their travel choices. This was particularly true among the younger respondents (18-34 year-olds).
  • Sporting Events: 28% have traveled to attend a sporting event.
  • Adventure: 25% have taken a vacation in pursuit of adventure and thrill from hiking to whitewater rafting.
  • Music: 21% have taken a vacation that included attending concerts and/or music festivals.
  • Educational travel: More than 15% reported traveling to delve deeper into the history and/or culture of a particular destination.

UPDATE:  Click here to see Luxury Cruise Line Siverseas educational itinerary, here if you are a stock or commodity investor and here for a Jazz cruise.

UPDATE (2):  I keep seeing more and more on this subject, and apparently it has a name: "edutainment."  Read this excellent cruise talk central article about Holland America,

Source: June 2008 American Express Travel Survey

The Cruise Community – Who is this site for?

Who could benefit from this web site?  Almost anyone interested in marketing and research. Sustainable growth and development of consumer markets is a delicate balance of both art and science.  But more than that, it is a systematic process of identifying and maximizing business potential by meeting consumers conscious and subconscious needs.  That systematic process can be applied over and over for any industry.

The cruise industry itself is vastly larger than just the ships we observe in ports of call. It includes:

  • Cruise Lines
  • Advertising Agencies
  • Travel Agencies and Agents
  • Stockholders
  • Industry Analysts
  • Trade Associations
  • Cruise customers
  • Travel and Tourism Colleges and Universities
  • Ship Builders
  • Employees
  • Ancillary Industries
    • Vendors
    • Suppliers
    • Transportation services
    • Retailers
    • Ports
    • Destination cities and countries